Windows Phone revenue "abysmal", still better than Android

The Seattle PI has done some sleuthing in Microsoft’s annual report to the U.S. Securities and Exchange Commission and found out that by subtracting a few figures, you get a rough $600 million dollars in revenue for fiscal year 2011 for Windows Mobile and Windows Phone.

The math comes from taking the $8.103 billion in Xbox sales away from the $8.716 billion from the whole Entertainment and Devices Division, resulting in $613 million in Windows Mobile, Windows Phone, Zune, Mediaroom, Surface and hardware sales. That means of course that actual revenue is lower than $600 million for just Windows Mobile/Phone.

Nick Eaton of the Seattle PI calls this "abysmal" and depending on how you look at it, perhaps. Compared to Xbox, sure. Compared to Android? Not so much. After all, Google makes $0 from Android sales, though they do take in some money through the limited advertising on the phone. In that sense, making money off of the OS is not Google's goal, but market saturation is. The same is the same for Microsoft at this point. While they do charge for licenses, it's not exactly an area of revenue for them, nor are they banking on it (pun alert). However, neither was Xbox which took 5 years to turn a profit (and after losing billions).

From this we can take away what we already know: Windows Phone sales are not "hot" and this does not change things, making it perhaps a moot point. Microsoft's game plan is Mango, Nokia and Skype for the future. Their make or break moment will be first half of 2012 when all of their systems (PC, Xbox and Windows Phone) really start to converge into a cohesive ecosystem. 2010-11 was more of them warming up and laying the groundwork, which is quite impressive. Throw in the fact that Windows Phone scores higher than Android in user satisfaction, there's no real reason Windows Phone can't explode in market share during 2012. So lets revisit this next summer, shall we?

Windows Phone revenue "abysmal", still better than Android

Mango will help for sure, there is no longer going to be a feature gap with android and iOS once we get Mango out. The rest is up to OEMs and solid MS advertising which I expect will come now that they're not behind on any of the big name things like "multitasking" that the competition can attack them on.Expect lots of WP marketing this holiday and all of 2012.

Whilst Google do not make money from the core OS, they do get something for the closed source components that are not a part of the OS. When Google issued a cease and desist on the distribution of the Rom with Android Market, gmail, Google Maps e.t.c, they had this explanation for doing so:"With a high-quality open platform in hand, we then returned to our goal of making our services available on users' phones. That's why we developed Android apps for many of our services like YouTube, Gmail, Google Voice, and so on. These apps are Google's way of benefiting from Android in the same way that any other developer can, but the apps are not part of the Android platform itself. We make some of these apps available to users of any Android-powered device via Android Market, and others are pre-installed on some phones through business deals."A lot of people seem to overlook the licenced parts of Android that are included in most handsets sold.

Not to mention they hold the majority of the patents involved in the creation of Android, (I say majority because Microsoft, and several others hold patents involved in it as well) which they can also profit from.People always tout that Android is free and open source, yet they never look at the fine print. Android manufacturers likely pay more than the 15$ per handset that Microsoft charges to make an Android phone because of patent leases (ie: to Microsoft, Sun, etc.) and the ability to use the Google apps.

This is the thing though. Windows Phone needs Mango and new handsets.Everyone seems to be counting WP7 out, but people are immensely satisfied with it. The seeds are planted... They just need water. Mango, advertising, and word of mouth will bring that.If Windows Phone isn't "successful", by the end of 2012, something's gone wrong. Until that point, it's too preliminary to tell.

More like 2006-2011 was laying the groundwork. I've been hearing forever about how "next year Microsoft will finally get its house in order". It was supposed to happen with Vista, with Xbox 360, with Zune, with Win7, with the original release of WP7, now with Mango. The next promised land is Win8/WP8 and Xbox 720. I'm not sure if I could hold my breath any longer...

I'm not sure your waiting list is fair Mango Lover. You should take XBox and Win 7 off of that list because XBox is making a profit and is the number 1 gaming platform in the world and Windows 7 is not only selling well but it is the best OS MS has ever released. Now that I think of it, Zune has done it's part because it was the first glimpse that MS could make a portable device that was enjoyable to use and just worked. I think MS is getting it's house in order. If you look at the widespread movement to introduce cloud services and the hardware to access it, you can clearly see what MS's general strategy is and how this is bigger than just WinPhone but yet and still WinPhone is a big part of the push. I believe it's too early to tell how all of this is going to turn out but I really like what MS has been producing and am excited for the future.

In the Google-Oracle patent dispute case, Google tried to claim that they make no money from Android and that the money made through advertising on Android devices has no relation to the Android operating system, therefore should pay Oracle $0The judge ruled that the advertising revenue Google derives as a result of phones that use Android is revenue from Android, and Oracle's damages estimate should be based on that.So Google does in fact make billions from Android

I don't think that the make-or-break moment will be until late 2012 - early 2013. The market is NOT full of early adopters and the retailers are slow to change focus (perhaps they are incentivized by the competition).Once the broader market catches on, however, look out.Even now, many of my cool-ade-drinking, iPhone-using friends are saying: "Wow! Let me see your phone!"Simple test: if you have a friend with an iP IV, get them in a car. While driving, use the voice control on your WP7 to call someone...like a mutual friend with a complex name. Ask your friend to do same and see if your voice control resolution doesn't beat the heck out of theirs.

wow, what a misleading headline and misinforming comparison. Saying Google makes zero revenue on Android is just utter nonsense. Google successfully monetizes Android within billions. Twisting partial facts to your liking is just fanboyism. Let's just be fair losers and stop trying to tease the winning competition in every sentence.

Good lordy. Since when is 600 million is abysmal! And saying google revenue on their Android OS is zero has to be a mistake. They're not in it for **** and giggles. I'm sure they're making money hand over foot.

You know it is kind of funny because before this weekend I had only seen maybe 2 or 3 Windows Phone 7's out in the wild but this past week at disneyland they were everywhere. Alsmost every line I was in the people in front and back of me had HD7's and I also saw about 10 Samsung Focuses in the park. The only other phones I recognized were maybe about 7 total Iphones and 3 or 4 Android Phones. I was shocked that I saw more WP7 devices at disneyland than any other smartphone.Not sure if it was just chance or WP7 is really starting to take off. Hope it was the latter!

Hope it was the latter too. I really hope Microsoft starts applying some of the focus and strategy they've used successfully to promote the Xbox/Kinect to WP7, if Nokia pulls through with a steady stream of hardware like they promised and there is good advertising there is every reason to believe WP7 will start to sell more. I know of 1 person at work who got a Trophy based on the recommendation of another WP7 user and my boss with an Arrive says he prefers it over the Thunderbolt he got as a work phone. WP7 works well for many now, Mango will make it better but unless MS actually lets people know about it they won't even know to try it. They told people about Kinect, time to let the world know about WP7!BTW, thanks to WPcentral for fixing posting from WP7, this was sent from my now fully functional Dell Venue Pro. Yay!

Very true but Xbox took a very long time to get going even with an onslaught of press buzz because of Halo. It was more Xbox Live that made Xbox successful in the long run and that took a long time to build up a set of services... And now Kinect is enjoying taking advantage of all those years of work. Windows Phone 7 up until now is a pretty hard sell, I even had trouble recommending it before Mango because of the third party scrolling. Mango changes everything though, I already thought WP7 had a huge advantage in the UX but now that they have fixed all the deal breaking issues with scrolling, browser compatibility and resume times it is ready for prime time. I think this next year is going to be very big for Nokia and Windows Phone 7 and I am really excited!

I'd say it was either coincidence or the fact that you are more likely to recognize a WP7 device, since that's what you know, and they tend to be distinctive.WP7 has what, 1% share? I would love for it to be taking off, but it hasn't even passed 6.5 to my knowledge in market share.

I'll continue to use and support WindowsPhone 7. My only fear is things dont look up after mango and new handsets that come out, that MS will start thinking about pulling back a little bit incase they have to plug altogether. Let's face it, they have the money to abandon ship and do something else.

I'd like to correct a mistake in this article, since nobody at this site likes to check facts it would seem. Google directly makes money on any major handset/tablet. Google Apps (gapps) are not free/open source. They are liscenced. That's why many creap **** devices don't have them. So google makes money directly, and official android devices aren't free.

This is not correct, Google does not charge for their official Apps they are not open source but are free to phone manufacturers who comply with Google's devices standards and pass quality tests. Google makes no money of Android OS or the Apps directly, even the 30 percent cut they take from App sales goes to service carriers. They do benefit greatly from the ecosystem they have created though.http://news.cnet.com/8301-1035_3-10072682-94.html

it's all microsoft marketing fault... I don't know why MS doesn't see this!xbox succeeded cause it is not named as "windows console"... it's names 'xbox'....... if they would have named their xbox as 'windowns console' it was going to be a completely flopthey MUST change the name of windows phone to something else!!! people just RUN AWAY from the 'microsoft' or 'windows' name, that's a fact!, they all laugh when u mention them the word 'windows phone'google succeeded with their phone cause they named it 'droid'... that name is a killer name.... most people buy it cause of the 'droid name'

This article kinda taps dances around one fact and outright spins another. The outright spin has been called to task by a lot of posters here- that Google somehow made no money off of Android. Both advertising revenue and Apps provide huge income for Google. HUGE. For our authors to spin it any other way is a little silly.The dance involves the profits. First off, let us not get facts confused with best guesses- this article is a best guess. A good guess, but a guess. But to brush off 600 million as no big deal as Windows builds from the ground up is a little bit on the wishful thinking side. It sounds like a ton of money, but it is a horrid profit level for mobile. Mobile is THE fastest growing segment of tech, and it isn't even close. However, Microsoft seems very happy with rolling out a great, dependable product at a slower pace. I am sure they have a war chest for W7, and can absorb the start-up. If not, they would have pushed out devices left and right to offset the slow sales. I think they have 2 full years for W7, simply from the lack of panic. They have learned a lot of lessons from the Windows Mobile experience, the main one being you can not get a bad reputation back.

@snowmuttWhat outright "spin"? Here is my direct quote "After all, Google makes $0 from Android sales, though they do take in some money through the limited advertising on the phone"Derp. Google does not charge for a license for Android. Fact. They do make money off of the limited advertising on the phone. Also fact. Both of which are mentioned, neither denied.It's not my fault that you and others on this site aren't reading the content.And nowhere did we say that $600m was impressive. The article is written mostly tongue in cheek, something evidently over a lot of your heads.

Daniel, Daniel, Daniel ...Let's start with the the title: "Windows Phone revenue "abysmal", still better than Android". Simply not true. Not only does Google collect revenue from direct advertising, it get's far more revenue selling the marketing data it collects from users just using its apps and applications. You can't backpedal by saying the post is tongue and cheek when the title is an absolute fabrication. You're incomplete knowledge on how Google actually makes money doesn't help matters. For example, in your response to snowmutt you state:"Google does not charge for a license for Android."False. Google does charge for its tier 3 license. I don't know how many if any of these licenses Google sells but part of the act of "spin" is ignoring all or part of the facts.And whoa! WTF:"It's not my fault that you and others on this site aren't reading the content.And nowhere did we say that $600m was impressive. The article is written mostly tongue in cheek, something evidently over a lot of your heads. "So now you're throwing out generalized attacks to a segment of WPCentral users because they happen not to read a "tongue and cheek" post as carefully as you would have liked. If readers are suppose to ignore the seriousness of certain statements made or not made, you can't get mad if they don't make the choices you want. Your nosism of the royal "we" in your reply just capped off a poor post with a weak attempt at superiority.

This is such a fanboy article. Why are you so threatened that you need to say "Yea we're not doing well but at least we're better than Android!" You sound so insecure. How about we compare revenues from HTC or Samsung selling Android handsets..most of their money comes from android I'll guarantee.

Too early to tell at this point but those of you proselytizing WP7 and how it is going to take off need a dose of reality. WP7 is a good product but given how late to the game MSFT was I see it being very hard for them to get people to switch from two equally as good, if not better, offerings in Android and iOS. I think most people are pretty satisfied with their iOS and Android devices and are not just going to switch on a whim. Furthermore, iOS and Android have a more developed consumer ecosystem surrounding their products. As the users devote more and more time to developing their content ecosystems on their respective devices, switching costs to the user get higher and higher. Once again, the concept of the MSFT ecosystem is sound and will hopefully well-executed but it just seems like too little, too late. Speed kills, and we all know that speed is not one of MSFT's strong points. It is going to be a long and winding road for MSFT. As a Seattle native I hope that they can navigate it.

While Google does not make any money off of licensing, Microsoft DOES. HTC is paying $5 per phone. Some handset makers are paying $10-$15 per. Microsoft is suing Motorola for an Android royalty.Steve Ballmer last year: "Android has a patent fee. It's not like Android is free."Yes, my friends in the MS community, Steve Ballmer is a patent troll! Microsoft is running a protection racket to profit off Is this possibly where the $600 million is coming from?